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TMI Blog2022 (4) TMI 1115X X X X Extracts X X X X X X X X Extracts X X X X ..... T seeking to revise the original assessment order dated 31.12.2007 passed under section 143(3) in the guise of revising the reassessment order dated 4.3.2013 passed under section 147/143(3) of the Act, is without jurisdiction, illegal and bad in law. 1.3 That on the facts and circumstances of the case in law, since the reassessment order was patently without jurisdiction, impugned revisionary proceedings were also without jurisdiction, illegal and bad in law. 1.4 That on the facts and circumstances of the case and in law, the impugned order dated 27.03.2015 passed under section 263 of the Act, without appreciating that the twin conditions of that section viz., assessment order being erroneous as well as prejudicial to the interests of the Revenue, were not satisfied, is illegal and bad in law. 1.5 That on the facts and circumstances of the case and in law, the CIT erred in exercising revisionary jurisdiction in respect of issues, which stood merged with the order(s) of the appellate authorities and, therefore, the impugned order is without jurisdiction, illegal and bad in law. 1.6 That on the facts and circumstances of the case, the impugned order dated 27.3.2015 passed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ding that the assessing officer erred in allowing deduction under section 80-IB of the Act in respect of various other manufacturing units [including Mini Blast Fumance ("MBF") unit], 4.1 That on the facts and circumstances of the case and in law, the CIT exceeded his jurisdiction in setting aside the reassessment order on the aforesaid issue of deduction 80- IB of the Act, despite the fact that the eligibility to claim deduction under that section was not at all subject matter of consideration in the reassessment proceedings. 4.2 That the CIT erred on facts and in law in holding that the appellant is not entitled deduction under section 80-IB of the Act in respect of various manufacturing units. 5. That the CIT erred on facts and in law in failing to appreciate that even the issue of quantum of deduction under section 80-IB of the Act in respect of profits derived from MBF unit was outside the scope of revisionary jurisdiction. 5.1 That the CIT failed to appreciate that deduction under section 80-IB in respect of MBF was extensively examined during the course of original as well as reassessment proceedings and the same was, therefore, outside the scope of revisionary j ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... igible units 16,92,26,199 24,56,60,182 Total 2,54,83,62,358 1,89,75,12,408 The fact that the claim of deductions under sections 80-IA and 80- IB were verified by the AO in the original assessment order dated 31.12.2007 6. The Assessee filed appeal before CIT(A), which was partly allowed vide order dated 11.11.2008. The CIT(A) examined the claim of deduction under sections 80-IA and 80-IB and therefore, on the said issue of deduction claimed under the said sections, the assessment order stood merged with the order of the CIT(A) 7. Against the aforesaid order, cross-appeals were filed by the Assessee and the Department before this Tribunal, which were decided vide order dated 06.03.2014. 8. In the meanwhile, reassessment proceedings for AY 2005-06, were initiated by the AO vide notice dated 23.03.2012, issued under section 148 of the Act. The AO, thereafter, proceeded to complete reassessment vide order dated 04.03.2013 reducing the amount eligible for deduction in respect of MBF units to Rs. 32,36,61,107 from Rs. 41,20,57,046/- on the ground that accumulated losses upto AY 2004-05 amounting to Rs. 8,53,95,939/- were required to be reduced for working out the allowab ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rified by the AOin every assessment year(s), which is evident from the fact that in various assessments, claim of deduction(s) were substantially varied/ reduced; * on the issue of claim of deduction under sections 80-IA and 80-IB of the Act, appeals were filed before the CIT(A) and therefore, assessments for various assessment years stood merged with the order(s) of the CIT(A). Further, in certain assessment years, this issue also stood decided by this Hon'ble Tribunal; * books of account were produced, verified and examined by the AO in various assessment years, including assessment year 2005-06, the year under consideration. Finally the Ld.PCIT passed order dated 27.03.2015 under section 263 of the Act. 12. We find delay in filing of the present appealis owing to the appeal filed by the assessee before th Hon'ble High court by way of alternative remedy before Hon'ble Court. Arguments of the Assessee 13. Revisionary order u/s 263 - barred by limitation: In the guise of revising reassessment order dated 04.03.2013, which was passed under section 147 on the limited issue of quantum of deduction under section 80-IB only in respect of MBF unit, the CIT passed order under se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sment order. In that case, reassessment order was passed on two issues, viz., non-deduction of tax on payment of interest and allowability of ESOP expenses. Therefore, revisionary order passed on issue of non-deduction of tax at source on free airtime and roaming charges was held to be barred by limitation since limitation had to be seen from the original assessment order. Hon'ble Bombay High Court in Ashoka Buildcon Ltd V. ACIT: 325 ITR 574 (Bom) Pg. 38-44 of CLC has also taken the same view. That similar issue was also considered in the case of CIT V. Shriram Engg. Construction Co. Ltd: 330 ITR 568 (Mad). (Pg. 45-49 CLC) It is important to mention a recent decision of Indira Industries vs. PCIT, Madras High Court ([2018] 95 taxmann.com 292 (Madras)) has followed the said Supreme Court ruling and has stated that initiation of 263 proceedings is illegal and bad in law. Reliance was also placed on the decision of Allahabad High Court in the case of L.G. Electronics India (P.) Ltd. v. PCIT: 388 ITR 135 in a writ petition challenging validity of notice under section 263, been held that notice under section 263(1) of the Act has been issued with reference to a discrepancy occurred ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... CIT: 95 ITD 363 Maricolndustries Ltd. v. ACIT: 115 TTJ 497 In view of the aforesaid, the assessment order qua the issues/ claim, which was subject matter of appeal before the CIT(A) and ITAT (deduction under sections 80IA and 80IB of the Act), merged with the order of the CIT(A). Consequently, the said claim/ issue(s) was clearly beyond the scope of revisionary power vested in the CIT under section 263 of the Act. (iii) Claim u/s 80IA and 80IB allowed by the AO after due application of mind 19. In respect of the year under consideration, the AO after due application of mind, and after detailed examination and verification, partially allowed the claim of the Assessee, in the original assessment order dated 31.12.2007. The same is evident from the replies filed by the Assessee and the order passed by the AO. Hence, the same cannot be subject matter of 263 proceedings now. The fact that the claim of deductions under sections 80-IA and 80- IB were verified by the AO is evident from discussions in the original assessment order dated 31.12. iv. Reassessment order neither 'erroneous' nor 'prejudicial to the interests of revenue- twin conditions not satisfied 20. The scope of prov ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and 80IB cannot be denied merely on the ground that separate books of accounts were not maintained. Hence, even on merits this issue stands covered totally in favour of the Assessee. It is submitted that on the same issue addition were proposed by AO on the draft assessment order for AY 2013-14, 2014-15 and 2015-16 and Assessee had filed objection before DRP. Considering the merits of the case, the DRP had decided the issue in favour of the Assessee and held that there is no mandate of law to maintain separate books of accounts for eligible undertaking in conventional form. It is submitted that since the DRP had already decided the issue on the merits of the case, the order passed under Section 263 of the Act is illegal, bad in law and without jurisdiction. In AY 2013-14 the Assessee had filed objection before Hon'ble Dispute Resolution Panel ("DRP"). Considering the merit of the case the DRP had given its finding on the issue as follows; 2.4.5 On perusal of the above provisions of law it is apparent that there is no imbargo on the claim of deduction in a case where power generated is used captively, and there is no mandate to maintained separate books of accounts. The only man ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tted that to take the same view in this year aswell as decided by the Hon'ble DRP. The assessee's request cannot be acceded on the following reasons. First, in taxation each assessment year is separate year and Hie AO can analyse any issue based on tho available facts. Second, the appeals for the earlier years on the issue are ponding before tho Hon'ble ITAT for adjudication. Therefore in view of the above the request of the assessee is rejected." 5.2. The AO has proposed addition of the entire amount of deduction claimed of Rs. 483,06,62,4577-. We have dealt with this matter in details in our Directions for AY 2013-14 dt. 24.09.2018 at paras-2.4.1 to 2.4.7 pages-5 to 15. There being no reason to differ, following our directions in AY 2013-14 the AO is directed to delete the proposed addition. Further, he has followed the direction of AY 2013-14 & AY 2014-15 in the AY 2015-16 as well and pass the order vide dated 18,h Sept 2019. The Relevant extract of the order is reproduced as under: DRP Directions: 16.1 The facts of the matter are similar to that in the case of the assessee in AY 2013-14 considered and decided by us vide our Directions dt. 24.09,2018. In this ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... proceedings. * There is, in fact, elaborate discussion of the claim of deduction under sections 80IA and 80IB of the Act in the regular assessment orders for earlier AY starting assessment years 2000-01. Further, claim of deduction under the said sections were substantially varied in all the assessment years. 23. There being no change either in facts or in law, as compared to earlier and subsequent years, the position determined by the department needs to be followed even on the principle of consistency. Specific Queries with regard to the unit wise accounts maintained by the assesse was asked by the AO and find mention in the assessment orders of various years. The assesse has submitted on various occasions - Form No. 10 CCB for power undertaking eligible for deduction and unit wise books of account for each undertaking. Assessee has specifically submitted in reference to the above-mentioned assessment years that deduction u/s 80IA of the Act was framed on the basis on separate books of accounts maintained at all the locations, where from specific profit and loss accounts were prepared for said units. In this regard, reference is made to submission dated 23.08.2004 for AY 2000 ..... 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